KBRA affirms the senior unsecured debt rating of BBB+, the subordinated debt rating of BBB, and the short-term debt rating of K2 for Tupelo, Mississippi-based Renasant Corporation (NASDAQ: RNST) (“the company”). In addition, KBRA affirms the deposit and senior unsecured debt ratings of A-, the subordinated debt rating of BBB+, and the short-term deposit and debt ratings of K2 for its subsidiary, Renasant Bank. The Outlook for all long-term ratings is Stable.

Key Credit Considerations

Renasant Corporation (NASDAQ: RNST) (“the company”) is a $17.2 billion-asset bank holding company headquartered in Tupelo, Mississippi. Through its lead subsidiary, Renasant Bank (“the bank”), RNST operates a 150+ branch network across five states in the demographically attractive Southeast, including key MSAs of Atlanta, GA, Memphis and Nashville, TN and maintains a top four deposit market share in Mississippi. RNST offers a diversified range of financial, wealth management, fiduciary and insurance services to its commercial and retail customers. Additionally, the company’s loan portfolio is largely collateralized by real estate, though the risk remains adequately allocated amongst asset classes in our opinion, with a notable portion in residential mortgage (28% of loans), as well as investor CRE (~36% of loans). The remainder of the portfolio continues to be well diversified by loan type and geography, with C&I comprising 14% of loans; the C&D portfolio, at 11% of total loans, adds a modest layer of risk to the company’s profile, in KBRA’s view. RNST has largely grown through opportunistic M&A with 5 transactions since 2013, and most recently, in 2022, acquired Southeastern Commercial Finance, LLC, (an ABL company) as well as Republic Business Credit (a factoring and ABL company). Outside of the 2022 acquisitions, RNST had been more focused on organic growth including the addition of new lending teams, expansion into existing markets and into new markets.

Rating Sensitivities

In KBRA’s view, a rating upgrade in the near future is not anticipated. Nonetheless, greater density in RNST’s new urban markets and growth in the core earnings profile, in tandem with continued strong asset quality and capital metrics could lead to positive rating momentum over time. The ratings incorporate a certain degree of resilience based upon KBRA’s stress testing; therefore, a rating downgrade in the near term is not expected. However, negative earnings trends, or a material deterioration in asset quality or capital metrics could pressure the ratings.

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Methodologies

Financial Institutions: Bank & Bank Holding Company Global Rating Methodology

ESG Global Rating Methodology

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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